Question 1

Computer Integrated Manufacturing focuses on reducing the complexity of the physical manufacturing layout of the shop floor.

Accepted Answer

False

Question 2

Cement and petrochemicals are produced by the batch manufacturing method.

Accepted Answer

Cement and petrochemicals are produced by the continuous manufacturing process, not the batch manufacturing method.

Question 3

A company's value stream includes all steps in a process,both essential and non-essential,for which the customer is willing to pay.

Accepted Answer

A company's value stream includes all the steps (both value-added and non-value-added) required to bring a product or service from its initial concept to the customer. However, the customer is typically only willing to pay for steps that directly add value to the product or service, not for non-essential steps.

Question 4

Accounting in a world-class manufacturing environment emphasizes standard cost and variance analysis.

Accepted Answer

In a world-class manufacturing environment, the emphasis is on lean manufacturing, continuous improvement, and the reduction of waste, rather than on traditional standard cost and variance analysis.

Question 5

Batch processing creates a homogeneous product through a continuous series of standard procedures.

Accepted Answer

Batch processing involves performing a set of operations on a limited quantity of materials at one time, resulting in a heterogeneous product. Each batch may require slightly different procedures or ingredients, leading to variation in the final product.

Question 6

The philosophy of customer satisfaction permeates the world-class firm.

Accepted Answer

The philosophy of customer satisfaction is a key component of a world-class firm's culture and operations. It is essential for maintaining and building a loyal customer base, as well as driving long-term growth and success. Therefore, it is true that this philosophy permeates the world-class firm.

Question 7

A purchase requisition authorizes the storekeeper to release materials to individuals or work centers in the production process.

Accepted Answer

A purchase requisition is a request for the purchasing department to acquire materials, goods or services for the company. It is not an authorization for the storekeeper to release materials to individuals or work centers in the production process. The storekeeper receives a release order from the production department or production supervisor to issue materials to the authorized individuals or work centers.

Question 8

The only objective of the Just-In-Time philosophy is to reduce inventory levels.

Accepted Answer

The Just-In-Time philosophy aims to eliminate waste and increase efficiency in production processes by synchronizing production with customer demand, focusing on quality improvement, and minimizing inventory. While reducing inventory levels is an important aspect of JIT, it is not the only or ultimate objective.

Question 9

The complexities of ABC have caused many firms to abandon this method in favor of a simpler accounting model called value stream accounting.

Accepted Answer

This statement is true. Many firms have found value stream accounting to be a simpler alternative to ABC.

Question 10

Typically the only allocated cost in the value stream is a charge per square foot for the value stream production facility.

Accepted Answer

The answer of Typically the only allocated cost in the...

Question 11

The cost accounting system authorizes the release of raw materials into production.

Accepted Answer

The cost accounting system is responsible for tracking and analyzing costs associated with a company's production process, but it does not authorize the release of raw materials into production. This is typically a function of the production or inventory management department.

Question 12

The bill of materials specifies the types and quantities of the raw materials and subassemblies used in producing a single unit of finished product.

Accepted Answer

The bill of materials (BOM) is a comprehensive list of raw materials, components, and subassemblies needed to manufacture a finished product. The BOM specifies the types and quantities of each item required to produce a single unit of the finished product.

Question 13

ABC assigns cost to cost objects based on their use of activities.

Accepted Answer

Activity-Based Costing (ABC) allocates costs to cost objects based on their use of activities, as opposed to traditional costing methods that rely on direct labor hours or machine hours.

Question 14

Reports generated by the cost accounting system include performance reports and budget reports.

Accepted Answer

The cost accounting system generates performance reports and budget reports to provide information on the financial performance and adherence to budgeted amounts.

Question 15

The work-in-process file is the subsidiary ledger for the work-in-process control account.

Accepted Answer

The work-in-process file contains detailed information about the production process and is used to maintain the accuracy of the work-in-process control account in the general ledger.

Question 16

The two subsystems of a traditional conversion cycle are the production system and the delivery system.

Accepted Answer

The two subsystems of a traditional conversion cycle are the physical system and the information system.

Question 17

Lean manufacturing evolved from the Toyota Production System (TPS),which is based on the just-in-time (JIT)production model.

Accepted Answer

Lean manufacturing is a methodology developed from the Toyota Production System (TPS) which is based on the just-in-time (JIT) production model.

Question 18

Manufacturing resources planning (MRP II)has evolved into enterprise resource planning (ERP).

Accepted Answer

MRP II was the predecessor of ERP and over time it has evolved into a more comprehensive system known as ERP.

Question 19

Move tickets authorize the storekeeper to release materials to work centers.

Accepted Answer

The answer of Move tickets authorize the storekeeper to release...

Question 20

The objective of the Economic Order Quantity model is to reduce total inventory costs by minimizing carrying costs and ordering costs.

Accepted Answer

The Economic Order Quantity (EOQ) model determines the optimal order quantity that will minimize total inventory costs, which includes carrying costs (costs of holding inventory) and ordering costs (costs of placing an order). Therefore, the objective of the EOQ model is to reduce total inventory costs by minimizing these two types of costs.

Quiz 7: The Conversion Cycle